contract strategy

For years now, the Department of Defense (and all other government agencies) has had to deal with the unpredictability of possible government shutdowns and ongoing resolutions. According to Pentagon Comptroller, David Norquist, “We’re in a very different place now.” At the Professional Services Council’s 54th annual Vision Federal Market Forecast conference, he explained, “Under a continuing resolution, we often had to wait until spring to do some things—now we can finalize them now or do them on schedule.”

Norquist predicted major shifts in the defense budget’s structure based on the Administration’s December 2017 National Security Strategy. Its underlying theme, he said, “is a return of great power competition” with Russia and China, which will require sub-agencies and contractors to better serve the warfighter.

According to Norquist, the defense budget is “large and complex”: bigger than the combined inventories, employees, and assets of WalMart, Apple and the state of California. Audits are necessary to fill gaps and plug holes.

His team will look at the condition of equipment, supplies, warehouses, and other buildings to generate “a laundry list of weaknesses.” Auditors will ask whether the items exist, whether the data are accurate, whether items are missing, and what shows up on financial statements. Contractors who built the systems being used, he added, will be privy to “the very quick feedback loop on what’s being fixed.”

Norquist advised contractors to focus on an agency with a problem to which they bring a solution. Contractors who can solve an agency’s challenges or fulfill a need will be the winners in 2019.

If you have questions or need assistance give us a call at 301-913-5000.

During a recent industry day, GSA reiterated that the Portals Program will focus on transactions under the Micro-Purchase Threshold. The current draft of the 2019 National Defense Authorization Act grants a GSA request to increase the Micro-Purchase threshold for purchases through approved portals to $25,000. If included in the final draft, this will make the Portals Program the preferred vehicle for any micro-purchases. The GSA Schedules Program will remain the preferred contracting vehicle for all other commercial item procurements. GSA said this would simplify the acquisition process and address federal buying requirements (such as considering AbilityOne and designated small business contractors for procurement).

On the other hand, not all industry partners are so enthusiastic. Will this create two completely separate market places for the same services and products, at two different price barriers? Some contractors are nervous that the Portal initiative might create a different compliance structure from Multiple Award Contracts, potentially leaving businesses with difficult decisions. The concern is that the move will create parallel systems of compliance and companies will have to weigh the cost of navigating both.

Roger Waldron, president of Coalition for Government Procurement, has an example. “If there are compliance requirements in one channel and they don’t exist in another channel, do (businesses) stay in the channel where they have compliance requirements and increase costs and lower margins? They are going to be making those kinds of business decisions ultimately.”

In response, GSA officials said they are still weighing how to design the policies for the portals and would be testing the new micropurchase threshold in a proof of concept pilot sometime next year. Jeffrey Koses of the Office of Governmentwide Policy said GSA is “still trying to determine if this is more of an [indefinite delivery/indefinite quantity] type of relationship or is this something else. It’s a fair question. I don’t know if we have all of the answers at this point.”

Are you a Schedule 48, SIN 653-8 contractor? This office relocation area of the Transportation, Delivery, and Relocation Schedule is disappearing into the ether, and soon. GSA has decided to consolidate two very similar SINs under two different schedules.

If you also have a Schedule 71 IIK contract, SIN 712-3, you are golden and don’t have much to worry about — your services are already covered under the other contract; GSA will simply cancel your Schedule 48 SIN (or the entire Schedule if 653-8 is your only SIN).

For those with only the single 653-8 SIN on Schedule 48, GSA will move your services onto SIN 712-3. Typical government-ese bureaucratic work will be involved, but it’s not too egregious.

For those who have additional SINs on Schedule 48, you have a choice of deleting the relocating SIN and keeping your Schedule, as well as applying for the 71 IIK SIN after 1 July; OR delete the other Schedule 48 SINs, canceling the contract and transitioning to 71 IIK and then re-applying through streamline for Schedule 48.

Whew. Confusing, right? Fear not, we are here to help. Give us a call at 301-913-5000, and we’ll get you through it!

A plausible source at GSA has told EZGSA proposal specialists that the minimum yearly sales requirement for GSA Schedules is going to be increasing soon.

While this won’t be a problem for contractors that already more than meet the current sales requirement of $25,000 in the first two years and $25,000 per year subsequently, it could make it even more difficult for those businesses that struggle with selling off their Schedule.

If you need help or have questions about this increase, please contact your EZGSA proposal specialist or call 301-913-5000.

GSA offers continuous contracts to successful MAS contractors

With so many of our current clients approaching the sunset of their 20-year contract Schedule periods, we are pleased that GSA has finally released an official rule to help with ongoing Blank Purchase Agreements (BPAs).

In the past, the end of the Schedule options meant contractors had to perform a juggling act with their government clients to keep BPAs from becoming inactive or going to a competitor. When BPAs extend past the expiration date of their underlying MAS contracts, orders can be placed until the last day of the schedule contract, but no option periods can be used after the Schedule contract expires.

GSA has finally allowed contractors to maintain overlapping or continuous contracts. These contracts are essentially duplicate MAS contracts for different periods of performance. Holding two contracts is not mandatory, and for many contractors, would be unnecessary. But for others, it can be a business-saver.

For those that do need it, continuous contracts will allow contractors to complete work under BPAs, while simultaneously seeking new business opportunities. Contractors should be aware that this may result in extra reporting burdens, but will be happy to know that MAS now has a streamlined process and revised requirements for previously successful contractors submitting offers for new contracts under the same schedule.

Readiness assessments, financial statements, corporate experience, open ratings report, and relevant project experience requirements have all been eliminated or greatly reduced for successful MAS contractors. To qualify, contractors must propose the same Special Item Numbers as those awarded under existing contracts, meet the minimum sales requirement under the existing contract, and demonstrate a pattern of satisfactory past performance.